Why Britain needs an innovation bank

Everyone agrees that Britain needs as many fast-growing innovative companies as it can get. We need our bankers to be as enthusiastic about lending to them as they are to buy-to-let property companies.

The problem is that while buy-to-let offers the security of bricks and mortar with the possibility of rising prices and rising rents, innovative companies offer little but risk and uncertainty – but they are infinitely more important to our future.

Pfizer Limited

Innovative companies can have significant value in their intellectual property, usually a copyright or a patent. But unlike a buy-to-let property there is no confident market price for a patent, or even a well-functioning market. Banks don't lend against collateral they can't value, and which even the company may not be able to value. But we live in an era in which intellectual property and so-called intangibles – everything from databases and computer programmes to brands and management know-how – are ever more important.

Large companies know what it means to thrive on their intangible assets and intellectual capital. Pfizer's bid for AstraZeneca is partly designed to secure all-important IP and intangible assets – chiefly the British firm's drugs pipeline.